A Watchdog With Teeth

Oakland’s newly strengthened Public Ethics Commission now looks to be one of the toughest in the state. But it’s facing a big test this fall.


PEC Executive Director Whitney Barazoto (left) has assembled a formidable staff.

Photo courtesy of the Public Ethics Commission

For nearly two decades, the Oakland Public Ethics Commission was understaffed, underfunded, and unable to hold city officials accountable for wrongdoing. The PEC’s many shortcomings also contributed to a general mistrust of Oakland city government. So two years ago, Oakland voters sent an unambiguous message to City Hall: Give the PEC some teeth. In November of that year, Measure CC, which sought to strengthen the agency and specifically earmarked funds for investigations into campaign finance and ethics violations, received a whopping 73.9 percent of the vote.

In June 2015, the city council adopted a budget beefing up the commission, and over the next several months, PEC Executive Director Whitney Barazoto hammered out a plan for strengthening the agency, while hiring staffers and public corruption investigators. And in early July of this year, the revamped commission announced the results of its first major investigation: A $14,400 fine levied against Oakland manufacturing company AB&I Foundry for illegally laundering campaign contributions through its employees to Oakland political candidates. It was the largest fine ever levied by the PEC.

“I’m really excited about our team,” Barazoto said in an interview. “AB&I was a symbol of what we can do.”

Barazoto has made it clear that she intends to assemble one of the toughest political watchdog agencies in the state. She has hired two veteran investigators from the state’s primary watchdog, the California Fair Political Practices Commission, or FPPC. One of them is now her chief of enforcement, Milad Dalju, who was an attorney for the FPPC’s enforcement division.

The PEC’s new primary investigator is Simon Russell, a former special investigator with the FPPC who spearheaded probes into campaign finance, ethics, and lobbying misdeeds. Barazoto used to work for the FPPC, as well.

In fact, the many connections between the PEC and the FPPC aided the probe of AB&I Foundry, which ended up being a joint investigation. The FPPC levied an additional fine of $100,000 against AB&I for laundering campaign contributions through employees.

In the PEC’s part of the case, AB&I officials admitted that they funneled company cash to workers who then made contributions to two 2014 Oakland mayoral candidates: Councilmember Rebecca Kaplan and ex-Port Commissioner Bryan Parker. In all, AB&I employees donated $4,600 to Kaplan and $2,500 to Parker using company money. The contributions were illegal because they violated Oakland’s $700 cap on donations from a person or single entity.

The FPPC’s part of the investigation, meanwhile, concluded that AB&I had also laundered thousands of dollars in donations in 2012 to then Councilmember Ignacio De La Fuente and in the 2014 election to then mayoral candidate Joe Tuman, then-Mayor Jean Quan, and Councilmember Desley Brooks. Neither the FPPC nor the PEC uncovered evidence that Kaplan, Parker, De La Fuente, Tuman, Quan, and Brooks were aware of AB&I’s money-laundering scheme. The FPPC’s fine was larger because of stricter state laws and because Oakland has a two-year statute of limitations on campaign finance wrongdoing, while the state statute is five years.

FPPC Chief of Enforcement Galena West praised the joint investigation. “Working cooperatively with the Oakland Public Ethics Commission allowed us to combine our resources and expeditiously prosecute violations.”

This fall, Dalju and Russell will be keeping close tabs on the Oakland election, which promises to be awash in campaign cash. Public records show that by June 30, the American Beverage Association had already spent $600,000 on glossy mailers and slick TV ads in opposition to a soda tax measure—which it’s calling “a grocery tax”—on the November ballot. In addition, three other November ballot measures—seeking to strengthen the city’s rent control law, create a strong independent police commission, and passing a $600 million infrastructure and housing bond—are expected to attract big donors, too.

But perhaps the most pivotal PEC investigation this year involves a probe into whether current Council President Lynette Gibson McElhaney illegally used city resources in a case involving a proposed apartment building next to her home that she opposed. Earlier this year, the Alameda County Civil Grand Jury concluded that McElhaney had violated the city’s ethics laws and used her position of power to influence a city decision on the apartment building.

In a letter to the grand jury, the Oakland PEC said it planned to wrap up its McElhaney probe by the end of the year. The investigation promises to be the first real test of Oakland’s new tougher political watchdog. And the timing is key, particularly if the results are damning, because McElhaney is running for reelection in November.

Published online on Sept. 14, 2016 at 8 a.m.

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